NEW YORK  Securities regulators yesterday fined Arthur Andersen $7 million for signing off on financial statements for Waste Management that inflated the trash hauler's income by more than $1 billion over four years.

The Securities and Exchange Commission said Arthur Andersen "knowingly or recklessly issued materially false and misleading audit reports on Waste Management" between 1992 and 1996. The SEC also sanctioned four partners at the accounting firm.

In settling the case, Arthur Andersen did not admit or deny wrongdoing. Nevertheless, the case is embarrassing for the firm, especially because it comes on top of the $110 million Andersen agreed to pay last month to settle an accounting fraud lawsuit for the work it did for Sunbeam. Days later, the SEC filed suit against four Sunbeam executives, including former CEO "Chainsaw" Al Dunlap, charging them with manipulating earnings for the blender and toaster maker.

Richard Walker, the SEC's director of enforcement, blasted Andersen for its role in the Waste Management mess, saying: "Arthur Andersen and its partners failed to stand up to company management and thereby betrayed their ultimate allegiance to Waste Management's shareholders and the investing public."

Waste Management and Arthur Andersen agreed to pay $220 million in 1998 to settle shareholder lawsuits. Andersen paid $75 million of the settlement and still faces one more class-action lawsuit.

"There are important lessons to be learned from (yesterday's) settlement by all involved in the financial reporting process," Terry Hatchett, managing partner for Andersen, said in a statement. "The pressures on management to meet expectations are greater than ever in a market where information and capital move instantaneously. In this environment, expectations of auditors, management and audit committees are higher than ever."

The SEC fined Robert Allgyer $50,000. Allgyer, now retired, was at one time responsible for Andersen's team at Waste Management. Edward Maier and Walter Cercavschi, current Andersen partners, were fined $40,000 and $30,000, respectively. The three and Robert Kutsenda, another Andersen partner, are barred from doing accounting work for publicly traded companies for periods ranging up to five years.

According to the SEC, Andersen allowed Waste Management executives to "bury" certain costs by improperly using one-time gains to offset them. When the bad accounting practices were uncovered in 1997, Waste Management was forced to take a total of $3.54 billion in charges and writedowns.

"The former officers of the old Waste Management that were referenced in Arthur Andersen's settlement with the SEC are no longer at Waste Management," A. Maurice Myers, the company's chairman, said in a statement. "We have worked hard to put in place a new management team that can both prevent the problems of the past and focus attention on enhancing our position."